Answer:
Price to be paid now = $52.89
Explanation:
<em>The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return. </em>
T<em>he stock would be held for just a period, hence we would use the single period return model. This is given as follows:</em>
Price now = D/(1+r) + P×(1+r)
Dividend , r - rate of return, P -year-end price of stock
Dividend = 4.35, r-16%, P- 57
Price = 4.35/(1.16) + 57/(1.16)= $52.89
Price to be paid now = $52.89
